aura by shuifanglj

VIEWS: 3 PAGES: 35

									ODR AND CONSUMERS 2010
Vancouver, BC




        CONSUMERS AT A CROSSROAD
            Cross-border eDisputes
           and Global ODR Schemes.
            A European perspective
                       Aura Esther Vilalta
                         avilalta@uoc.edu
                 Universitat Oberta de Catalunya
           International Interdisciplinary Institute (IN3)                        1
                                                             Espai de paginació       2 / 25
Introduction

I. Grounds of some Cross-border eCommerce Concerns.
     1. In general.
     2. Europe.
           2. 1. Consumers concerns in ecommerce.
           2. 2. Consumers concerns regarding ADR/ODR.
           2. 3. The European Consumers Centers (ECCs) concluding
           remarks
           2. 4. Challenges in Europe in the coming years.
II. Some collaborative efforts to boost ODRs.
     1. European. ECC-Net.
     2. International. Global ODR System design.
III. Suggestions for further discussion.
                                                                    2
ODR AND CONSUMERS 2010
Vancouver, BC

• Introduction

• Domestic and cross-border purchases in virtual
  marketplaces have increased at a large scale during the
  last decade. And in a vast majority of cases, consumers
  are involved. The gap between domestic and cross-
  border ecommerce is widening, though.

• Although parties involved in transnational disputes can
  seek redress into traditional channels (ADR methods or
  court proceedings), in this specific arena only electronic
  means of resolution (ODRs) are appropriate effective
                                                               3
  mechanisms for redress.
ODR AND CONSUMERS 2010
Vancouver, BC




    Source: Organization for Economic Cooperation and Development (OECD) ICT
    Database. DSTI/CP(2009) 20/FINAL. Empowering E-consumers Strengthening
      Consumer Protection in the Internet Economy Background Report (2009).
                      Percentages of growth In the OECD area.
                                                                               4
ODR AND CONSUMERS 2010
Vancouver, BC




• Transnational ecommerce in Spain alone has increased
  from 314 million Euro (€) in 2005 to 1 327 million Euro
  in 2008.
•   Source: Comisión Española del Mercado de las Telecomunicaciones.


• The European e-commerce market has increased from
  109 billion € in 2002 to 392 billion € in 2007
•   Report on cross-border e-commerce in the EU (2009). Commission Staff
    Working Document EU.


                                                                           5
ODR AND CONSUMERS 2010
Vancouver, BC
 .
 I. Grounds of Cross-border eCommerce Concerns.

 1. General.

        Uniqueness of e-Commerce (payments concerns..).
        Plurality of rules, legal provisions and jurisdictions.
        Cost of legal advice.
        Complexity of court proceedings .
        Cost-benefit assessment.
        Diversity of languages.
        Diversity of cultural backgrounds .
                                                                  6
ODR AND CONSUMERS 2010
Vancouver, BC



2. Europe.

2. 1. Some consumers concerns in ecommerce:
   Language, cultural and technical barriers.
• Lack of customer support, complaint handling
• Lack of dispute resolution in multiple languages
• Cross-border payments.
•   (Report on cross-border e-commerce in the EU (2009). Commission Staff Working
    Document EU).


2. 2. Consumers concerns regarding ADR/ODR:
• Lack of awareness
• Refusal of business to enter the procedure.
                                                                                    7
•   (EU DG Sanco 2009 conclusions).
ODR AND CONSUMERS 2010
Vancouver, BC

2. 3. The European Consumers Centers (ECCs) have analyzed the
   problems linked to online shopping and in their concluding remarks,
   emphasize that is necessary improvement in some areas:

    – Efficient alternative dispute resolution mechanisms (ADR).
    – Effective enforcement of general consumer protection rules.
    – Promote transparency (delivery costs, credit card fees, etc).
    – Harmonization of consumer law.
    – And to provide with safety nets for credit card payments.

(Source: Report on cross-border e-commerce in the EU (2009). Commission Staff
   Working Document EU).

                                                                                8
ODR AND CONSUMERS 2010
Vancouver, BC

2. 4. Challenges in Europe in the coming years.

The European Union is based on the premise that an internal market
benefits European citizens. Consequently, the European Union Treaty
legitimizes their bodies to enact provisions in competition law and
consumers law, in order to secure a plural competitive market.

Since the Lisbon Treaty, the EU legal system is getting structured upon
the principle of “social” market economy, which means that the market
should support consumers and should care about their satisfaction -that
is to say, be “functional”, and not merely a target.

This particular perspective has an impact in the “model of concurrency”,
which is not intended to be perfect but effective and efficient in terms of
ensuring diversity and balance in trade, and effective protection to
consumer’s needs and interest.                                             9
    ODR AND CONSUMERS 2010
    Vancouver, BC



(i) The European model of concurrency:



European Union                           market economy

The EU Treaty (Lisbon)            “social” market economy
.



                                         model of concurrency


                                                                10
ODR AND CONSUMERS 2010
Vancouver, BC



Ground rules of the European “social” market economy:


(i)     Information.
(ii)    Transparency of terms and clauses.
(iii)   Truthfulness in advertising messages.
(iv)    Fairness in business practices.
(v)     Contractual balance


                                                        11
ODR AND CONSUMERS 2010
Vancouver, BC


(i) The European model of concurrency:

Hence, the legal system developed by the European Union is based in
  a series of ground rules, basically:

• Rule of information and transparency of terms (to support
  informed decision making for consumers).

• And truthfulness and fairness on advertising messages and
  contracts (by way of illustration, establishing the legal right of
  withdrawal during 7 days after the conclusion of a contract - cooling
  off period).
                                                                     12
ODR AND CONSUMERS 2010
Vancouver, BC

 (ii) The contractual diversity.



 Another challenge in Europe is the existing diversity of laws. The
   intellectual atmosphere in Europe is prone to the harmonization of
   contractual laws. The grounds that favors this trend is that legal
   contractual diversity between Member States is undermining the
   trade into the European market. Moreover, the diversity of legal
   treatment depending on whether or not a consumer is involved is
   being appreciated increasingly as unfair, because asymmetries may
   also occur within B2B transactions.



                                                                  13
ODR AND CONSUMERS 2010
Vancouver, BC

(ii) The contractual diversity:

• So, paradoxically, despite the European Union Treaty do not provide
  avenues for the harmonization of contractual laws, this goal is being
  achieved through consumers protection laws and the “legislative
  technique of maximum harmonization”.

• Also, the boundaries between individuals, consumers and
  businesses are blurring. By way of illustration, the Unfair
  Commercial Practices Directive 2005/29/EC, addressed to
  misleading and aggressive practices, and apply not only to
  consumers but also to small businesses.

                                                                     14
ODR AND CONSUMERS 2010
Vancouver, BC

 (ii) The contractual diversity:



                                 • UE Treaty (Lisbon)
                               • Social market economy
                 .

                        • harmonization of consumers
                 .        protection laws


                        • harmonization of contractual laws
                 .
                                                              15
ODR AND CONSUMERS 2010
Vancouver, BC


(iii) The structural gap between law and effective protection.

European last surveys show that in the European Union, consumers
often withdraw and feel powerless to exercise their rights under
existing law. This occurs because expensive, cumbersome and long
court proceedings are deterring consumers from acting in their own
interest.

This trend leads to a dangerous structural gap, a lack of real
effectiveness of consumers protection remedies.

Therefore, the Stockholm program, approved by the European
Council on December 2, 2009, is devoted to foster strategic policies
in the coming years in order to overcome this serious gap:
                                                                       16
ODR AND CONSUMERS 2010
Vancouver, BC

The Stockholm Program promotes:

   –To eliminate barriers to the recognition of legal acts in other
   Member states.

   –To devote priority to mechanisms that facilitate access to justice.

   –To ensure trust, reliance and understanding.

   –To prevent overlapping and a lack of coherence of rules.

   –To remove obstacles to the settlement of civil law matters.

   –To improve alternative methods of settling disputes.

   –And to use electronic tools to the full.                              17
ODR AND CONSUMERS 2010
Vancouver, BC

        (iv) The “mandatory” attempts through ODRs

       Another concern in Europe were the mandatory attempts to
    mediate or conciliate through ODR mechanisms, as were
    considered barriers for the access of consumers to the Courts.

       The Court of Justice of the European Union (case Telecom Italia
    SpA): Effective judicial protection can also be reached through
    mandatory ODR attempts provided that such procedure does not:

    (i) lead to a decision binding on the parties;
    (ii) involve substantial delays for a claim before the courts;
    (iii) mean to abandon prescribing right;
    (iv) generate disproportionate costs to the parties;
    (v) constitute the only form of access to conciliation and to other
    possible means of resolution.
    (vi) Prevent later access to the Courts.
                                                                      18
ODR AND CONSUMERS 2010
Vancouver, BC


• This means, in brief:

• A significant shift in Europe in the way of understanding
  conflicts resolution (an approach to the common law’s
  perspective) and also a shift from continental law
  towards an economic interpretation of law, more focused
  on efficiency and material satisfaction of citizens than on
  seeking formal justice.



                                                           19
ODR AND CONSUMERS 2010
Vancouver, BC
• II. Current collaborative efforts to boost ODRs

• It may be highlighted that currently there are many ODR initiatives
  devoting their efforts to consumers. But the vast majority of them
  operate only at national scope.

• At European level, since 2005, the European Union boosts a
  Consumer’s Network –called the "ECC-Net"- that:
       - provides with a software architecture for communication +
  support to national ODR centers,
       - and supplies with broad information to consumers + and links
  to national consumer’s centers and ODR schemes.

• This architecture is, however, regional.                              20
ODR AND CONSUMERS 2010
Vancouver, BC
II. Current collaborative efforts to boost ODRs.
1. European: ECC.NET




                                                   21
ODR AND CONSUMERS 2010
Vancouver, BC

2. International

In the international arena we can identify, at least, 3 significant
    initiatives:

    (i) The agreement reached between Consumers International and
    Global business Dialog on electronic commerce (2003).

    (ii) The OAS (Organization of American States) and ODR initiative
    for electronic commerce

    (iii) And lately, the Global ODR system.
•                                                                       22
ODR AND CONSUMERS 2010
Vancouver, BC




                                     Global ODR System




                           UNCITRAL Initiative


                   US Proposal OAS –ODR

                GBDe                                     23
ODR AND CONSUMERS 2010
Vancouver, BC


•   On march 2010, The United Nations (UNCITRAL) in conjunction with the
    Pace Law School Institute and the Penn State Dickinson School of Law
    presented a crucial colloquium at the Vienna International Centre.

•   There, leading experts on ADR/ODR engaged in a dialog and came to
    some conclusions. Briefly and to what is relevant here, it is been considered
    that:
•
     (i) It is essential for the growth of the transnational e-commerce to fill de
          gap in online cross-border disputes, so that business and consumers
          have an effective option to resolve conflicts;
     (ii) And that conservative estimates suggest that millions of small value
          disputes could be resolved via a global ODR system annually;
                                                                                     24
ODR AND CONSUMERS 2010
Vancouver, BC
• The Pace Law School and the Penn state Dickinson School of Law,
  considering the US proposal for the OAS-ODR Initiative, have
  elaborated a draft that contains a very elaborated proposal. The
  process described in this proposal is aimed to: (i) use technology in
  order to provide negotiation, mediation and arbitration, for cross
  border consumer claims and up to USD 10.000$; (ii) offer buyer full
  right to pursue other forms of redress, including protection programs
  provided by third party organizations or payment channels; (iii) allow
  parties be represented by attorneys; (iv) and fix as default language
  of communication during the process- the language used to conduct
  the transaction in the first place.

• The process is based in a multiphase system structured in 3 stages:
  the negotiation phase (electronically), the mediation phase
  (agreement) and/or online arbitration phase (which can be
                                                                    25
  eventually concluded with a binding award).
ODR AND CONSUMERS 2010
Vancouver, BC




The Global ODR System proposal
Flow process




       Automate
      negotiation
                    .      Mediation
                          /conciliation
                                          .   Arbitration
                                                            .

                                                                26
  ODR AND CONSUMERS 2010
  Vancouver, BC

  III. Suggestions for further discussion
Having in mind the previous concerns and challenges just mentioned, I share
  some suggestions for further discussion, aiming to contribute to this significant
  proposal:
• 1. Taking into account the fact that one of the main grounds of consumers
  dissatisfaction is that traders are reluctant to participate in ADR/ODRs, and
  considering that when traders undertake to enter in the process, the average
  of settlements is very high, it would be desirable a design that integrates a
  mandatory attempt to negotiate to businesses.
• 2. Having in mind also that a global efficient and cost effective ODR system
  needs a very complex software architecture, the pilot project may be limited
  to: (i) online transactions (ii) which payments are online (iii) and for claims
  consisting exclusively in reimbursement.
• 3. Considering as well that there is a commonly recognized right of
  withdrawal in many States, during the first 7 days after the completion of the
  contract (cooling-off period) the system should be designed to facilitate the 27
  implementation of such this right. .
ODR AND CONSUMERS 2010
Vancouver, BC

III. Suggestions for further discussion

4. Given the existence of many domestic national ADR/ODR servicces
   devoted to consumers redress that are free of charge or cost
   effective, a Global ODR System may be designed in terms that will
   be built with full interoperability with other means of resolution.
5. Also, taking into account that private arbitration for consumers
   redress is controversial in some countries, the a Global ODR
   System should also provide with an optional expert panelist.
6. Having in mind that traders are “serial litigants”, it seems important to
   strengthen the image of independence by avoiding full financing
   coming from businesses or corporations and to involve consumers
   associations and other organizations (stakeholders).
7. Recognizing the need to streamline the system, we suggest the flow
   be structured in two escalated stages as follows:                       28
ODR AND CONSUMERS 2010
Vancouver, BC

Proposed
Flow process option:
                                Mediation
                                        .
                             /conciliation/nat
                                ional arb

           Others?




  Automat            Global ODR                  Arbitration/
 negotiation         mechanisms?                   Panel




                                                                29
ODR AND CONSUMERS 2010
Vancouver, BC


Detail                                         .
                                                                                          ECC Net


                                                       EU Regional
                                                      clearinghouse
         Global ODR System                         Others?
         Central Administrator
                                                   Mediation Conciliation
                                                   National arb




                                                                                  Arbitration
                                  Automat
                                                        Global ODR                    or
                                 negotiation            mechanisms??
                                                                                    Panel




                                                                                                .Decision
                                   Agreement                          .   Award



                                                                                                            30
ODR AND CONSUMERS 2010
Vancouver, BC


(i) A first stage: with an automat negotiation mechanism, where:

        -The attempt would be mandatory for traders.

         -And that the outcome, accordingly with worldwide commonly
       accepted principles, will not be considered an award or final decision,
       but a contractual transaction.


(ii) And a second stage, if the automat negotiation do not lead to a
     positive outcome, that will confer two options for consumers: to
     apply for a mediation, con conciliation or national arbitration… / or to
     move on and rely the decision to an appointed panelist or arbitrator.

                                                                                 31
ODR AND CONSUMERS 2010
Vancouver, BC
In the second stage:
• (i’) The first option (to initiate a mediation / conciliation / or national
    arbitration) will mean theses processes be trusted to any of the
    existing external accredited ODR providers (linked to the Global
    ODR system).
 -This structure will prevent complexity and costs to the System, as the
    mediation /conciliation phase formally requires cumbersome
    technology and to be monitored by a neutral, who is not empowered
    to decide.
 -And in this case, the Global ODR System will address the conflict to
    the chosen ODR, and would release a report stating that the
    process with the central administrator has been concluded).

• (ii’) The second option, to move on and rely the case to the
  decision of an administrative panel (expert) or an arbitrator, will 32
  mean that the case is decided by an expert appointed by the System
ODR AND CONSUMERS 2010
Vancouver, BC

Outcomes:




                         33
ODR AND CONSUMERS 2010
Vancouver, BC

• III. Suggestions for further discussion

•   8. Outcomes. For traders, the decisions rendered by experts and the
    awards of arbitrators should be binding and final (under threat of removal of
    label if do not comply) . For the consumer, de decision of the expert is
    optional (can refuse the outcome if applies for other remedies) but, once
    accepted, becomes also binding and final unless issued in violation of
    prescribing rights; and the awards should be binding and final (again, if not
    issued against mandatory principles.
•   9. Considering that the decision rendered by the expert is optional for the
    consumer, the expert may be empowered to mediate first.
•   10. As the system is aimed to be effective and trusted, it may be of
    paramount importance that the architecture, bodies, process flow,
    accreditation standards, outcomes and some general common principles of
    consumers ecommerce be reinforced with international legal instruments.
•   11. Finally, in order to maximize the accountability, the software may track
    record of final outcomes, prior removal of private identification data, for  34
    confidential and privacy purposes.
ODR AND CONSUMERS 2010
Vancouver, BC




                       My gratitude
                    for your attention

                       Aura Esther Vilalta
                         avilalta@uoc.edu
             Universitat Oberta de Catalunya (UOC)
           International Interdisciplinary Institute (IN3)
                                                                              35
                                                             Espai de paginació    2 / 25

								
To top